Chico’s FAS Earnings Call Insights: White House and Improvement
Chico’s FAS, Inc. (NYSE:CHS) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Neely Tamminga – Piper Jaffray: Dave, I was just wondering if you can talk just a little bit about White House, it sounds like there has been a course correction here, some color flows. Just wondering if you’re able to share a little bit as it relates to the late August, September kind of early build the nature build to the business and how you’re feeling about it heading into Q3, Q4? And then, any changes related to your long-term view of the growth? And if you could weave in a little bit a lot that you talked about omnichannel and what that means for your business, what does that mean specifically for White House? And does that impact the longer term view over the fore count for White House over time? Just if you could give us a little bit of insights on the digital front there that would be helpful? Thank you.
David F. Dyer – President and CEO: Neely, somehow you manage to weave about 85 questions into one, but we’ll do our best. White House just had two much color too consistently in second quarter. And I think that if you go back and look at our history what we have done is we’ve kind of come in and had a cleansing power. It’s almost like serve between courses. We would have color and then we would go back to really a black and white delivery to kind of cleanse it up in the less — to less than it’s kind of get back to normal and to really sell down in that other color. We brought in color consecutively in consecutive deliveries and changed color and I just and I think that we had another one of the reds, pinks we felt like that we have repeated too quickly. So, when we went back and looked at it we really did realize that color cadence in the amount of color that we brought in such short amount of time was a problem. So, we have corrected that. You will see the sorbet course as we go forward and we will be cleansing our palette of color as we’ve done previously and we believe that, that will get us back to where we’ve always been. Also in White House, we’re going to continue to make sure that our affordable couture and unique product position is enhanced perhaps some of the really exciting items that we always put in that were the very difficult ones. We didn’t have enough of that balance in our assortments, so we’ve corrected that going forward. Now, the other question.
Neely Tamminga – Piper Jaffray: Omnichannel?
David F. Dyer – President and CEO: Omnichannel for White House – well, White House is kind of led an omnichannel. I think when you look at social media they have been one of the strongest in social media and integrating that in. They have a very strong direct-to-consumer piece, which is kind of seamless in the store. And while Boston Proper being our smallest division has been the most experimental with these tech tables and the fitting rooms, I think you’ll see the other brands as we get the technology stabilized following soon behind. I mean it requires in some places a different fitting room set-up. It will introduce in the new stores, but I think that we are making very, very good progress. I mean, we’re working on the iPad’s to optimize tablets, our new POS systems, which is being introduced in our Canadian stores and then starting to rollout – tested and rolled out next spring. We’ll certainly allow for mobile technology Pads, tablets anything that we won’t throw out as a technology. So there’s just a lot of things coming down the road and we’re trying to seamless integrate all these channels. I mean, honestly we don’t care where we get a sale or where the sale is initiated or generated or build from. If you do locate a store, it’s a store credit even though it shipped from DTC. It’s just doesn’t matter to us. We look at it seamlessly as one big channel and we just want to do the best that we can to serve the customer whenever, however, and wherever she wants to be served.
Liz Dunn – Macquarie Research: I was wondering if you could add some color to just your comments about the quarter-to-date. Is that improvement more driven by traffic or other factors and is it consistent across the brands?
David F. Dyer – President and CEO: I would say the improvement is consistent across the brands. I would say the traffic still remains a challenge. I think that we’re working hard to live within the traffic environment that we’re – that we are – have been dealt. I mean, we’re play the hand that we’re dealt, dealt well. So one thing that I think that it is an interesting point in all of this, again, our conversion is at all an all-time high. When the customer comes in the store, we convert her to sales. So we just need more coming in the stores. And I think that since the environment is such that it is not producing natural traffic, we just have to work harder to produce our own…
Liz Dunn – Macquarie Research: Is there anything you are doing on the marketing front to improve the traffic trends?
David F. Dyer – President and CEO: Yes.
Liz Dunn – Macquarie Research: Can you talk about it?
David F. Dyer – President and CEO: I think that a lot of the things that we’re doing in terms of looking at promotions, offers, the way that we’re doing our online marketing, the targeting that we’re doing. Things that we’re doing in prospecting, certainly our television commercials, which I think that you’ve just seen launched for Chico’s, White House is not quite yet. You will see new television commercials coming out in White House. So there is a lot of things that we’re doing. And these television commercials for White House will be more item specific too. So rather than just drive brand awareness we are going to drive product sales. So we think that there is, we need to create to reasons to buy and reasons to come into our stores to shop and that’s what we are working on.